Options: Call-Selling Suggests HMO Top

By Jud Pyle, CFA, chief investment strategist for the Options News Network

We saw call-selling across HMO stocks Humana(HUM Quote), UnitedHealth Group(UNH Quote) and Cigna(CI Quote) Wednesday, suggesting some investors see a cap, or ceiling, to the upside in HMO stocks as Republican representatives continue to express their side of the health care reform debate.

Looking at the HUM Nov. 32 calls, approximately 9,300 contracts crossed the tape yesterday. These calls, which closed down 20 cents, were home to open interest of 209 contracts heading into Wednesday's trading, suggesting yesterday's volume is very likely to translate as new positions. HUM shares closed up 6 cents to $28.34 yesterday. ...